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Yahoo in talks on stake in China's Alibaba
Updated: 2005-08-10 09:10

Yahoo Inc. is in talks to buy a stake in Alibaba.com, the Chinese business and consumer e-commerce site, in a move brokered by Japanese investor Softbank Corp., according to media reports.

Forbes.com reported on Sunday that Yahoo was considering paying around $1 billion to acquire a 35 percent stake in Alibaba.com, the Reuters reported.

China disclosed for the first time Wednesday the composition of the basket of currencies used to set the yuan's value, saying it mainly includes the U.S. dollar, euro, yen and Korean won.
A woman walks past an Alibaba billboard in Shanghai in this picture taken on May 11, 2005. [newsphoto]

Alibaba, whose largest investor is Softbank, had cash revenue of $68 million last year, more than double the $30 million in 2003.

The company was founded by Jack Ma in 1999, an English teacher turned entrepreneur, as a business-to-business (B2B) bridge between local Chinese producers and foreign buyers.

Softbank is also the biggest outside shareholder in Yahoo.

A report in the International Herald Tribune cited "people familiar with the talks" as saying that Softbank has played an important role in coordinating Yahoo's discussions with Alibaba.com.

A spokesman for Alibaba.com in Hangzhou, China, declined to comment on the reports. A spokeswoman for Yahoo was not immediately available to comment.

Yahoo shares rose 43 cents, or 1.3 percent, to $33.95 in Monday morning trading on Nasdaq.

A tie-up between Yahoo and Alibaba would pose a challenge to eBay Inc. in China, where Alibaba competes with the U.S.-based online auction leader through Taobao.com, a consumer-focused auction site.

At the end of last year Yahoo said in its annual regulatory filing that Softbank owned roughly a third of its Yahoo Europe and Yahoo Korea units. Meanwhile Yahoo owns one-third of Yahoo Japan Corp., which is controlled by Softbank Corp.

The reports follow the spectacular debut of Baidu.com Inc., a popular Chinese Web search company, which had the best first-day performance of any initial public offering by a foreign company on U.S. stock markets on Friday.

On Monday, China's version of Google, continued to shoot higher, gaining another $21, or 17 percent, to $143.80.

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